India's software industry is on course for a 30-40% leap in exports for the year to March 2002 despite the global economic slowdown, the country's main industry association has said.

Phiroze Vandrevala, chairman of the National Association of Software and Service Companies (NASSCOM), admitted to the BBC's World Business Report that last month's terror attacks had affected on the sector.

But the sector is still growing fast enough to hit a group target of $87bn in sales - and $50bn in exports - by the year 2008, Mr Vandrevala said.

"We started the year looking for growth of around 40%," he said.

"Clearly the indications from the early figures are that 40% is not likely to happen. But we will be close to it."

Affects stemming from last month's attacks represented the "final nail in the coffin" of the global slowdown, Mr Vandrevala said.

Final predictions on annual growth will not be made until all the group's members have reported figures for the three months to the end of September.

But even if the 40% figure is not achieved, that still left India's computer sector comfortably off compared with that in the rest of the world, Mr Vandrevala added.

In the current environment, if we can pull off these kind of numbers we will be doing very, very well," he said.

Tailing off

A sector growth rate of 30-40% would represent a sharp slowdown from the levels seen in recent years.

The industry was 65% bigger in the first three months of 2001 than it was a year before.

Analysts say India's software companies are vulnerable to the after effects of the attacks on the US.

More than 60% of last year's 280bn rupees ($5.84bn; £4.05bn) in software exports went to North America.

Picking up the pieces

Mr Vandrevala, who is also executive vice president of India's largest software exporter, Tata Consultancy Services, said that the sector's long term outlook was bright.

The likelihood was that richer countries would continue to outsource to India as financial pressures build at home, he said.

"We may have a weak quarter or two, but we don't think that's something that will have a long-term impact," he said.

Firms such as Infosys and Wipro have added overseas customers since 11 September.

Both have reported results which beat expectations, with Wipro's net profits rising 40% to 2.16bn rupees.

"The pitch we gave was that India is as far away from Afghanistan as Switzerland is from Chechnya," Wipro chief executive Vivek Paul said.